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Commercial Electric Rates & Line Items

Austin Energy’s commercial rate classes align with industry best practices and reflect what it costs to serve each class.

Pass-through Charge Changes Start November 2017

As part of the FY 2018 budget approval process which wrapped up September 19, the Austin City Council approved an increase in two pass-through charges for Austin Energy. The Power Supply Adjustment increased by 7.1% and the Regulatory Charge increased by 1.4%. These changes go into effect November 1, 2017.

As a community-owned utility, Austin Energy works to keep rates low for customers. The charges that are changing are dollar-for-dollar recoveries, and when costs change, the charges must change as well.

Lower Base Rates Adopted in 2016

On August 29, 2016, Austin City Council set new, lower electric base rates. Commercial customers overall received approximately $37 million of the reduction.

Part of the rate change includes switching from seasonal energy and demand rates to annual energy and demand rates. The new rates will be the same all year long. The result will be a lower energy rate during the hottest and most expensive time of the year for most of our customers. This change decreases the amount of money most customers pay each year and leads to more predictable bills month to month.

Customer Class

A Customer Class is a grouping of customers with similar energy-use characteristics. This is important because the cost to serve each class can vary substantially depending on customer service needs and electricity consumption.

An industrial customer, for example, may receive electricity through a single high-voltage line extending directly from a substation. A small business, just like a home, typically receives its electricity through a series of lower voltage lines starting from a substation.

Customer Charge

The Customer Charge recovers the costs of metering, billing, collections, and customer service incurred in managing customer accounts. Austin Energy incurs these costs for all customers, regardless of how much energy is used. Our rates apply a Customer Charge to most customers on a monthly basis.

Customer Charge ($ per month)

Commercial

Secondary Voltage 1

< 10 kW

$18.00

Secondary Voltage 2

> 10 < 300 kW

$27.50

Secondary Voltage 3

> 300 kW

$71.50

Commercial and Industrial

Primary Voltage 1

< 3 MW

$275.00

Primary Voltage 2

> 3 < 20 MW

$2,200.00

Primary Voltage 3

> 20 MW

$2,750.00

Primary Voltage 4

> 20 MW & > 85% LF

$11,000.00

Transmission Voltage 1

$2,750.00

Transmission Voltage 2

> 20 MW & > 85% LF

$21,120.00

Electric Delivery

The Electric Delivery Charge helps to recover the operating, maintenance and capital costs of our distribution system which includes poles, wires, transformers, and Smart Grid technology. This charge only applies to customers who are charged for demand.

Electric Delivery ($ per kW billed)

Commercial

Secondary Voltage 1

< 10 kW

$0

Secondary Voltage 2

> 10 < 300 kW

$4.50

Secondary Voltage 3

> 300 kW

$4.50

Commercial and Industrial

Primary Voltage 1

< 3 MW

$4.50

Primary Voltage 2

> 3 < 20 MW

$4.50

Primary Voltage 3

> 20 MW

$4.50

Primary Voltage 4

> 20 MW & > 85% LF

$4.50

Transmission Voltage 1

$0

Transmission Voltage 2

> 20 MW & > 85% LF

$0

Demand Charge

“Demand” is the maximum flow of power a customer uses at any one time. It is measured in kilowatts by an electric demand meter. Demand charges are a significant part of a business’s utility bill.

A Demand Charge is applied to all commercial customers with an average summer peak demand of 10 kW and higher. Starting in January 2016, Austin Energy began averaging each commercial customer's peak demand each June through September and assigned customers to the appropriate rate class based on that average.

The Demand Charge recovers fixed production costs related to building and financing Austin Energy’s existing and new power plants. Non-demand customers recover these costs in their energy charges.

Using a Demand Charge best reflects the way in which costs on the Austin Energy system are incurred and provides an incentive for our customers to decrease their load by making energy-efficiency improvements or by leveling their demand.

Energy Charge

The Energy Charge is generally designed to recover the variable costs of running the utility. It is billed on a cents per kWh basis and varies by rate class.

Inside and Outside Rates

About 6,500 commercial customers are outside of the City of Austin. Outside city commercial customers that pay a Demand Charge generally have lower rates than commercial customers inside the City of Austin.

Energy Charge (¢ per kWh billed)

Inside

Outside

Commercial

Secondary Voltage 1

< 10 kW

4.802¢

4.802¢

Secondary Voltage 2

> 10 < 300 kW

2.421¢

2.356¢

Secondary Voltage 3

> 300 kW

1.955¢

1.902¢

Commercial and Industrial

Primary Voltage 1

< 3 MW

0.053¢

0.052¢

Primary Voltage 2

> 3 < 20 MW

0.052¢

0.051¢

Primary Voltage 3

> 20 MW

0.152¢

0.152¢

Primary Voltage 4

> 20 MW & > 85% LF

0.0¢

0.0¢

Transmission Voltage 1

0.500¢

0.500¢

Transmission Voltage 2

> 20 MW & > 85% LF

0.0¢

0.0¢

Power Supply Adjustment

The Power Supply Adjustment recovers dollar-for-dollar the net costs of the kilowatt-hours used by customers. Austin Energy makes no profit on this dollar-for-dollar pass-through charge. It covers fuel for our power plants, the cost of electricity purchased from the grid and any net revenues (or losses) experienced as Austin Energy produces and sells power to the grid.

The Power Supply Adjustment is adjusted beginning with November bills to reflect the current price of fuel and projected Austin Energy power purchases.

Summer and Non-Summer Seasonal Power Supply Adjustment

In addition to the energy charge, the second major component of your bill is the Power Supply Adjustment (PSA). Unlike the energy charge, the PSA will vary between summer and non-summer months.

Austin Energy buys the power needed by our customers from the Texas electric grid at market prices. When demand for power peaks in the summer, so do our costs. To cover these pass-through costs, summer power supply rates are higher than our winter rates.

Regulatory Charge

The Regulatory Charge recovers dollar-for-dollar Austin Energy’s share of the statewide costs of managing, using, and maintaining the transmission grid, as well as other regulatory fees and penalties.

Transmission charges and fees are based on Austin Energy’s share of the summer statewide peak demand — about 4% of the statewide total.

The recent increase in the Regulatory Charge comes from the build-out of additional Statewide transmission assets. These costs are reviewed, approved and apportioned by the Public Utility Commission of Texas.